HHS awards $8.2M contract to Mathematica Inc. for Medicaid payment strategy analysis

Contract Overview

Contract Amount: $8,286,043 ($8.3M)

Contractor: Mathematica Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-20

End Date: 2026-09-19

Contract Duration: 1,825 days

Daily Burn Rate: $4.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: MEDICAID PAYMENT STRATEGIES MEDICAL LOSS RATIO MLR, RISK MITIGATION, AND STATE DIRECTED PAYMENT REVIEWS

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $8.3 million to MATHEMATICA INC. for work described as: MEDICAID PAYMENT STRATEGIES MEDICAL LOSS RATIO MLR, RISK MITIGATION, AND STATE DIRECTED PAYMENT REVIEWS Key points: 1. Contract focuses on critical areas of Medicaid payment strategies, medical loss ratios, and risk mitigation. 2. Analysis aims to inform state-directed payment reviews, potentially impacting healthcare access and affordability. 3. Mathematica Inc. has a track record in health policy research, suggesting relevant expertise. 4. The contract duration of 1825 days indicates a long-term commitment to this analytical effort. 5. This award falls under the Research and Development in Social Sciences and Humanities NAICS code. 6. The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee.

Value Assessment

Rating: good

The contract value of $8.2 million over five years appears reasonable for a comprehensive analysis of complex Medicaid payment strategies. Benchmarking against similar large-scale health policy research contracts suggests this is within expected parameters. The Cost Plus Fixed Fee structure, while requiring careful oversight, is appropriate for research and development where exact costs can be unpredictable. The fixed fee component provides a degree of cost control for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and innovative solutions. The presence of multiple bidders generally suggests a healthy market for these types of specialized research services.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down costs and encouraging high-quality service delivery through market forces.

Public Impact

Beneficiaries include state Medicaid agencies seeking to optimize payment strategies and improve program efficiency. The services delivered will provide critical insights into medical loss ratios and risk mitigation techniques. The geographic impact is national, as findings can inform Medicaid programs across all states. Workforce implications include the engagement of researchers, policy analysts, and subject matter experts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent monitoring to ensure costs remain reasonable and the fixed fee is justified.
The complexity of Medicaid payment strategies necessitates robust quality assurance to ensure the accuracy and utility of the research findings.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Mathematica Inc. is a reputable research firm with demonstrated experience in health policy.
The contract addresses a critical area of healthcare policy with significant implications for program effectiveness and beneficiary access.

Sector Analysis

This contract falls within the broader health services and research sector, specifically focusing on government health program analysis. The market for health policy research is competitive, with several established firms capable of undertaking such complex projects. Spending in this area is driven by the need for evidence-based policymaking to manage and improve large federal and state healthcare programs like Medicaid.

Small Business Impact

As this contract was awarded through full and open competition and does not appear to have specific small business set-aside provisions, its direct impact on small businesses is likely limited to potential subcontracting opportunities. The primary contractor, Mathematica Inc., is a large research firm, suggesting that the bulk of the work will be performed by them. Further analysis would be needed to determine if subcontracting plans include small business participation.

Oversight & Accountability

Oversight will likely be managed by the Centers for Medicare and Medicaid Services (CMS) program officials. The Cost Plus Fixed Fee contract type necessitates close monitoring of expenditures and progress reports to ensure adherence to the contract scope and budget. Transparency will be maintained through regular reporting requirements and potential public dissemination of research findings, subject to government approval.

Related Government Programs

Medicaid Program Integrity
Health Insurance Marketplaces
Medicare Payment Advisory Commission (MedPAC)
National Institutes of Health (NIH) Research Grants

Risk Flags

Potential for cost overruns in CPFF contracts if not closely monitored.
Ensuring the research findings are actionable and effectively implemented by diverse state Medicaid programs.
Maintaining data privacy and security throughout the research process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $8.3 million to MATHEMATICA INC.. MEDICAID PAYMENT STRATEGIES MEDICAL LOSS RATIO MLR, RISK MITIGATION, AND STATE DIRECTED PAYMENT REVIEWS

Who is the contractor on this award?

The obligated recipient is MATHEMATICA INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $8.3 million.

What is the period of performance?

Start: 2021-09-20. End: 2026-09-19.

What is Mathematica Inc.'s track record with federal health policy research contracts?

Mathematica Inc. has a substantial track record in conducting health policy research for federal agencies, including CMS and the Department of Health and Human Services (HHS). They have been involved in numerous studies related to Medicare, Medicaid, health insurance exchanges, and healthcare delivery system reforms. Their experience often includes evaluating program effectiveness, analyzing payment methodologies, and assessing the impact of policy changes. This extensive background suggests they possess the necessary expertise and institutional knowledge to successfully execute the current contract focused on Medicaid payment strategies and risk mitigation.

How does the $8.2 million contract value compare to similar federal health policy research efforts?

The $8.2 million contract value for a five-year period (1825 days) for comprehensive analysis of Medicaid payment strategies appears to be within the typical range for large-scale federal health policy research initiatives. Similar contracts awarded by CMS or other health-focused agencies for in-depth program evaluations, economic analyses, or policy development often fall within the multi-million dollar range, depending on the scope, duration, and complexity. Factors such as the number of states involved, the depth of data analysis required, and the specific research questions addressed influence the overall cost. This contract's value suggests a significant undertaking requiring substantial analytical resources.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks associated with a CPFF contract, such as this one, revolve around cost control and ensuring value for money. While the fixed fee provides some predictability, the 'cost plus' component means the government reimburses the contractor for allowable costs incurred. If costs escalate beyond initial projections due to inefficiencies, scope creep, or unforeseen challenges, the total contract value could increase. Effective oversight by the government is crucial to scrutinize incurred costs, ensure they are reasonable and allocable to the contract, and prevent potential overspending. The contractor also faces risk if they cannot complete the work within the estimated costs to earn their fixed fee.

How might the findings of this contract impact state Medicaid programs?

The findings from this contract are expected to significantly impact state Medicaid programs by providing evidence-based recommendations on optimizing payment strategies and managing financial risks. States can use the insights gained regarding medical loss ratios (MLRs) to ensure that a sufficient portion of premium revenue is spent on patient care rather than administrative costs. The analysis of risk mitigation techniques can help states design more stable and effective programs, potentially reducing financial volatility and improving the quality of care delivered. Ultimately, this research aims to enhance the efficiency, sustainability, and effectiveness of state-administered Medicaid programs nationwide.

What is the historical spending trend for similar Medicaid policy analysis contracts?

Historical spending on Medicaid policy analysis contracts by CMS and HHS has been substantial and generally increasing, reflecting the growing complexity and importance of the Medicaid program. Over the past decade, there has been a continuous need for research and analysis to inform policy decisions related to program expansion, payment reform, managed care, and cost containment. Contracts of this nature, focusing on critical areas like payment strategies and financial risk, are common. While specific historical figures for identical contract types vary, the overall trend indicates consistent and significant investment in analytical support for Medicaid policy development and oversight.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 600 ALEXANDER PARK, PRINCETON, NJ, 08540

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,286,043

Exercised Options: $8,286,043

Current Obligation: $8,286,043

Actual Outlays: $6,868,674

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC19D0091

IDV Type: IDC

Timeline